“`html
The derivatives division of trading platform Robinhood has filed a lawsuit against regulatory bodies in Nevada and New Jersey in an effort to prevent potential enforcement actions from the states regarding its sports event contracts.
In a duo of complaints submitted on Tuesday against Nevada and New Jersey gaming regulators and their attorneys general, Robinhood Derivatives stated that it began offering the event contracts in these states after federal courts earlier this year permitted prediction market Kalshi to provide the contracts.
Robinhood asserted in distinct lawsuits that following those legal decisions, Nevada and New Jersey continued to attempt to prohibit the company from offering the contracts despite the courts having stopped them “from doing so against Kalshi with respect to the same transactions.”
Kalshi sued Nevada and New Jersey gaming regulators in March, arguing that cease-and-desist letters from the states regarding its sports betting contracts were irrelevant as it is under the oversight of the Commodity Futures Trading Commission.
Federal courts in both states sided with Kalshi and prohibited the regulators from enacting enforcement measures against the firm. Both legal actions are still in progress.
Robinhood claims damage if not permitted to provide contracts
Robinhood contended that if the state regulators are allowed to take action against it while not against Kalshi, it will miss out to the platform in the realm of sports event contracts.
Event contracts enable users to wager on the outcomes of various events, such as sports matches or election results, and are fundamentally rooted in blockchain technology for transparency and resolving the validity of the contract.
Robinhood stated that its platform assists in the placement and liquidation of event contracts for its users, which are traded on Kalshi.
It expressed that given each state’s “refusal to acknowledge what this Court has already determined — that its threatened enforcement of state law is likely preempted by federal law — Robinhood had no alternative but to initiate this lawsuit to safeguard its customers and its business.”
Regulators dismissed Robinhood’s claims
Robinhood asserted in its lawsuits that the gaming regulators from both states rejected its claims that it should be allowed to offer event contracts after the courts ruled in favor of Kalshi.
It mentioned in its New Jersey lawsuit that it reached out to the state’s Division of Gaming Enforcement to clarify that it should be permitted to offer the contracts through Kalshi with the federal court’s decision permitting Kalshi to offer them.
“Division officials informed Robinhood that they could not agree to refrain from enforcement action even while this Court’s order was effective regarding Kalshi,” the company stated. It accused regulatory officials of failing to respond to a request for a meeting on the situation despite “multiple follow-ups.”
Related: Banking lobby seeks to amend GENIUS Act: Is it too late?
Robinhood indicated a similar situation occurred in Nevada after a local federal court sided with Kalshi, with its complaint alleging that the state’s Gaming Control Board told the company that if it proceeded to offer the contracts, it would be seen as “wilful violations” of law
Robinhood noted that the regulator dismissed its proposal to temporarily provide its customers in the state the same contracts offered on Kalshi.
In both complaints, Robinhood has requested the courts to issue an order preventing the regulators from acting against it and has submitted a petition for a temporary restraining order against each.
Magazine: Will Robinhood’s tokenized stocks TRULY dominate the globe? Pros and cons
Source link
“`